White label crypto exchange software is becoming the go-to solution for building customized digital asset platforms. They are quick to deploy, easy to brand and cost way less.
This guide will go through the nuances surrounding these solutions and some of the services you can contact to begin.
In this article:
- Consistent Growth in the Crypto Space
- Building a Crypto Exchange from Scratch
- Types of Cryptocurrency Exchanges
- Essential Components for Cryptocurrency Exchanges
- What are White Label Exchange Solutions?
- Best White Label Exchange Solutions
- Issues to Resolve before Starting your Crypto Exchange
Consistent Growth in the Crypto Space
Cryptocurrencies have taken the world by storm. Bitcoin saw tremendous value gains in 2017, rising to an all-time high of almost $20,000. The asset price rose despite a crackdown in China, which was one of its biggest markets at the time.
Now, cryptocurrencies have become a mainstay. News sources run segments on crypto, and analysts are paying more attention than ever.
Cryptocurrency exchanges are growing significantly, with CoinMarketCap currently listing 314 spot exchanges and 14 derivatives exchanges.
Even then, exchanges could still witness more growth. Data shows that Bitcoin adoption in the United States as of June 2019 was 5 percent. In the same vein, more Americans Googled “Bitcoin” than they did the “royal wedding” in 2019. This adoption level is despite Bitcoin’s relative youth and the lack of regulatory clarity that has stifled the industry.
A recent analysis from Forbes Magazine forecasts that cryptocurrency exchanges could grow even more in the next decade. The report highlights the crypto industry’s growth as a possible catalyst for a boom in the number of exchanges.
The rationale for building a crypto exchange is quite extensive. For one, there is the allure of being at the center of a fledgling industry. Trust in banks and centralized authorities is eroding almost by the day.
More people are looking into alternatives as a means of preserving their wealth. Cryptocurrencies provide a lucrative option, and an exchange is where these people congregate.
There is also a financial benefit. Owning an exchange means earning revenues from fees, transaction costs, ads, and others. The business model is relatively stable, although you will need to work out a way to get enough users.
Companies looking to start a crypto exchange has two was to start. They could develop the exchange from scratch or use a white-label cryptocurrency exchange solution.
Building a Cryptocurrency Exchange from Scratch
Building an exchange is never an easy endeavor. As a cryptocurrency entrepreneur, you might feel the need to develop your system from the ground up. This route is often the most expensive, and for some, the most rewarding.
You can also customize every single detail for your new bitcoin exchange. In rare cases, you could expect about 12 to 14 months for detailed planning, architecture, design, and debugging.
But is it worth it? How do you begin the process? To get started, let’s clarify the different types of cryptocurrency exchanges and how they differ:
Types of Cryptocurrency Exchanges
a. Centralized Cryptocurrency Exchanges
This is the most popular type of cryptocurrency exchange. It is run and controlled by a single company. A good example would be Coinbase and Binance. These exchanges act as the middleman, ensuring trades work between users and providing a custody service for storing their assets.
b. Decentralized Cryptocurrency Exchanges
Decentralized exchanges (DEX) are platforms that execute trades using smart contracts, thereby cutting out the middleman. They offer peer-to-peer trading between crypto users, which is crucial for security reasons. Peer-to-peer trading means users won’t have to hand over control of their coins to a third party.
c. Hybrid Cryptocurrency Exchanges
The hybrid exchange combines attributes from both. Like the decentralized exchange, it uses smart contracts to eliminate the need for a middleman. However, it also offers the low latency and quick transactions that a centralized exchange provides.
Essential Components for Cryptocurrency Exchanges
You also need to incorporate some vital components that form your exchange’s foundation. These include:
- User interface
- Trade engine
- Market-making system
- Admin panel
The trade engine is the center of the exchange. It performs transactions and combines buy and sell orders. Amongst all things, the trade engine should be fast and able to handle multiple requests in a second.
Your user interface should be user-friendly. If possible, you should also add support for various languages.
What Are White Label Exchange Solutions?
A white-label crypto exchange solution is a software developed by a third-party operator. It is then customized and rebranded for several companies. The company buying the software will brand the solution as its own and build on it to fit their needs.
An organization that purchases a white label cryptocurrency exchange won’t need a vast technical resource team to oversee and review it. It is pre-tested and running, and can be changed and customized.
The Benefits of White Label Exchange Solutions
a. Saves Time and Money
A white-label solution saves time and money. The modules are ready-made, which eliminates the need to build from scratch. You could save the time and money that you would have spent on additional development processes.
b. Easy Customization
White label cryptocurrency exchanges feature modular and straightforward architectures. Thus, with the right expertise, you will be able to make changes to their interfaces without messing up their technical functionalities.
The white label cryptocurrency exchange solution that you work with will design the trade engine, user interface, and admin panel. So, all you have to do is customize the platform based on your requirements and those of your target customers.
You can easily rebrand the exchange to fit your business’s needs. These rebrand components include interface layout, design, and more.
c. Quick Deployment
Remember that a white label crypto exchange comes with a core that is ready for operation. You merely need to make the required changes and deploy it.
d. Sustainability and Reliability
A white label crypto exchange comes with its earlier versions too. To enhance its functionality down the line, developers always have these previous versions as references.
e. Minimal Technical Expertise
Since a white label crypto exchange has everything you need, extensive coding knowledge isn’t necessary to operate it. If you want to upgrade the system down the line, you could always hire a developer.
The Best White Label Exchange Solutions
Getting a white label cryptocurrency exchange is usually the best bet for a company with limited resources. If you’ve made the decision, here are some of the top solutions providers you could consider:
HashCash Consultants functions as a global software company. The company was founded in California in 2015. Its subsidiary, HashCash Blockchain Products, allows crypto companies to make significant asset remittances across borders.
The company runs PayBito, a U.S.-based crypto exchange, and a crypto payment processor known as BillBitcoins. Some of its other services include digital asset investment, blockchain education, ICO services, and software solutions.
PayBito: White Label Crypto Exchange Features
The crypto exchange software from PayBito provides a high-frequency exchange that supports major global fiat currencies. That and they also provide a multi-sig cold wallet and encrypted hot wallets to secure users’ funds. You will get a robust matching engine to facilitate trades, for instance. That, and you’ll see a streamlined process for adding or removing trading pairs with ease.
The crypto wallet from PayBito also offers the following:
- Customer Management System (CMS)
- Document management
- Know-Your-Customer (KYC) security verification
- Block confirmation tracking
- UI/UX branding
- Admin access console
- Firewall implementation
- Block confirmation tracking
PayBito’s crypto exchanges are compatible with ERC-20 tokens, and you get a mobile application with your package. Exchanges support multiple languages too.
There’s no standard fee for an exchange on this platform. You will need to contact PayBito to get a quote. The company charges based on the features and capabilities that you will like in the exchange.
Skales is a German blockchain services provider. It boasts an extensive team of experienced blockchain developers. In fact, these experts have built a white label crypto exchange that provides customization and security over everything else.
This company has managed to provide exchange solutions to customers in over 20 countries. They even helped to launch the exchange for CoinHub.
Skalex: White Label Exchange Features
Skalex’s white label exchange comes with all the basics that you will need to serve any crypto investor or trader. These include:
- Order matching
- Liquidity tools
- Integrated wallet
- Funds management
- Multilingual support
- Support for various fiat currencies
- Unlimited ERC-20 support
- Payment processor integration
- Email interface
- Merchant plug-in
Skalex also prides itself on its security features. Some advanced security infrastructure that you get here include:
- Two-Factor Authentication (2FA): Skales’ 2FA is available for both your mobile app and desktop platform. Some methods include Google Authenticator, Email, and more.
- Encrypted User Access: The feature adds more security to your wallets.
- Deep Freeze: Hot wallets on Skalex will swap crypto funds to a multi-sig cold storage wallet. This feature allows groups of users to set up multi-sig wallets of varying sizes.
- DNS Failover: Skalex’s exchanges also run with Content Delivery Networks (CDNs). An example is Cloudflare, which protects against Distributed Denial of Service (DDoS) attacks.
- TLS Integration: This feature uses SSL encryption to protect all traffic to the website.
- Encrypted Data Transmission: Protects all user certificates and credentials used to access accounts.
- GeoIP Blocking: Prevents users in specific locations from accessing your service. It is nifty for compliance purposes.
Skalex also employs a flexible pricing system, although its pricing page shows that services start at €500 ($582.84) per month. You can access a pricing calculator to know your exact fare.
Infinite Block Tech is an American technology company. Based in California, they offer bespoke and highly functional crypto exchanges to their clients.
Infinite Block Tech: White Label Exchange Features
The white label crypto exchange from Infinite Block Tech comes with all the basics:
- Customer Management System (CMR)
- Firewall integration
- KYC/Verification System
- High capacity matching engine
- Wallet Management System
- Customizable user interface
- KYC/AML verification
- Integration with other crypto exchanges
- Block confirmation tracking
Like Skalex, Infinite Block Tech also pushes security when it comes to development. When it launched its white label exchange solution, it highlighted the crypto industry’s history with severe hacks. Part of its mission was to solve that.
Part of the exchange’s security features include:
- Anti DDoS: The feature protects against DDoS attacks, which have been rather prevalent in the industry over the years.
- Data Encryption: Protects every piece of data that flows through the exchange
- Multi-Factor Authentication: Allows you to set parameters and media for identity authentication — Email, Google Authy, SMS, etc.
- HTTP Authentication: Additional security certificate for your website
- Infinite Block Tech’s white label cryptocurrency exchange supports all major crypto and fiat currencies. The platform is also compatible with ERC-20 tokens, and it provides high-level liquidity to allow users to access quick conversion.
A white-label solution from this company can handle up to 50,000 transactions per second. Infinite Block Tech also assures that they will have your platform ready for launch in two weeks.
When you’re ready to launch, Infinite Block Tech will also provide support and maintenance services for your company. To improve the platform’s visibility on the Internet, you can check the service’s Search Engine Optimization (SEO) and marketing packages.
Infinite Block Tech Pricing
The pricing is not fixed. You have to contact the provider for a quote. They charge based on the time taken to deploy the exchange, the available features, and work that goes into creating the exchange.
Issues to Resolve Before Launching Your Cryptocurrency Exchange
Regardless of how you choose to create your digital asset platform, some issues are bound to arise. These include operational and business factors that will determine your exchange’s success. Here are a few of them:
a. Legal Problems
The whole cryptocurrency sector is often in a fight with regulators. This is due to the lack of clarity on how it works.
The first thing you need to do is clarify the legal status of your exchange in your jurisdiction. What is required? Who regulates it? What kind of assets can your users trade?
Some countries are much easier to launch than others. For example, in the U.S, different states have varying laws. Some states like New York require crypto firms to obtain a license before they’re allowed to operate in the state. This could mean a lengthy delay and lots of paperwork.
Cryptocurrency regulation varies between countries. However, operational requirements and directives differ too. Most countries also require crypto companies to adhere to an Anti-Money Laundering (AML) and KYC standards.
This is important to know before you start marketing your business online. Violating any of these laws will also lead to fines or even permanent closure.
Countries like Japan, Switzerland, Singapore, and Canada are crypto-friendly destinations.
b. Banking Partner
Exchanges that transact with fiat currencies need banking and payment partners. Your exchange will need a bank account for customers to send funds. You’ll also need a payment gateway to enable real-time payment.
Sadly, this is easier said than done. Banks in some countries (e.g., India) are still afraid to do business with crypto companies. In some cases, they are banned.
Your success with this will depend mainly on the banking rules in your incorporating country. Crypto companies tend to find it harder to partner with banks in regulated markets.
c. Liquidity Management
Your exchange’s liquidity position will depend on its trade volumes. Without high trading activity, you can’t conduct currency exchanges. So, to provide liquidity, your platform will need to attract investors and traders.
There are several ways of solving the exchange liquidity problem. You can join a bigger exchange network, with each network member sharing liquidity. Plus, the more extensive the network, the larger the liquidity you can access.
You could also implement an API that shares trade volume information between you and another exchange. You can choose between several available blockchain API providers to do this.
d. Establish a Customer Support Service
A courteous and professional customer support team is a sign that your cryptocurrency exchange is reliable. Hire customer support staff who are friendly and loyal to reach your clients and help them in any challenges.
Remember that your exchange’s reputation will significantly determine its success.
As cryptocurrency grows in popularity, exchanges will follow suit. In fact, they are even poised for more growth in the coming years. There are many considerations for companies trying to build crypto exchanges that can stand with the best in the business. Still, the cost and time consideration makes white label solutions a worthy alternative.